FINC 677 & LDEV 664: Camp strake

With the recent transaction between the Boy Scouts of America and Johnson Development Co., Dr. Peterson decided to bring this case to class and he let us bring our ideas for a development for this site.
Although we did not have an insight from the developer as we did in the Millican Reserve project and we certainly had fun. I have to admit though, I hope this transaction does not mean the beginning of the end of the scouts traditions.

Here a few general highlights of this project: 

Þ It is locates on the intersection of loop 336 and I-45, which is a great location as it draws demand from east, west through the loop 336 and takes about 12 to 13 minutes to get there from the Woodlands thanks to its proximity to I-45.

Þ Has an area of 2,046 acres.

Þ Will infill urban site within the city- agreement with the city

Þ Has a great access and visibility from 336 Loop and I-45

Þ Presence of natural assets- grand lake, deer lake, and trails. Johnson Development plans to preserve almost 1,200 acres of green space.

Þ Close to the San Jacinto River Corridor

Þ Has an Interesting site history

Þ Range of residential options

Þ Mixed use site

FINC 677 & LDEV 664: Wells Fargo came to class!

... and we got chocolates!
This Thursday we had Marc Krebs (Aggie Class '99) & Sarah Montgomery (Aggie class '10)
Marc Krebs started in the energy industry, then went to San Francisco, he is been in Houston Office in 2007.
Sarah Montgomery has been part of the Wells Fargo family for 4 years now. She tarted as analyst in Florida, then went to California and now is in Houston.

Here are a few highlights of their presentation:

• Largest bank in terms of market capitalization
• 272,000 + employees.
• Stock Price 54-43
• Priorities
• Putting Customers first
• Growing Revenue
• Managing Expenses
• Living our vision and values

• Credit Management training program (CMTP) (in San Francisco) is for 3 years.
• As an analyst you can change groups if you dont like commercial real estate banking.
• REIT is only east coast and west coast (Los Angeles & Chicago).
• Largest commercial Real Estate Lending (with 130k outstanding) and JP Morgan following in te second place.
• Their credit philosophy: They check on the people (who they are and values), on their credit (Balance sheet, credit history) and Real Estate (Location)
• The majority of their liquidity is minimum 5 million  dollars, average net worth is 20 million to 2.0 billion. They work all types of Real Estate. They follow the deal wherever it is, their expertise is devided all over the country and if necessary they send it to the right office.
• They talked about 'The domain northgate' at College Station TX (located where cafe Eccel used to be)
• loan 18.8 mm
• ltv 72% to 66%
• Loan term 4+1
• Interest only during construction
• amortization : 36 first months is interest only
• Will be delivered in august of next year
• Some cool insight is that, according to Mr. Krebs the market is definitely somewhere or approaching to the top of the cycle, interest rates are very high. But thinks that we will see things slowing down sometime soon. 

FINC 677 & LDEV 664: New York Real Estate prices are for real.

It always surprises me how high is the cost of Real Estate in New York.

Of course this could only happen in New York.

Source: Wall Street Journal

The 39th floor of the Pierre Hotel was recently leased for a monthly fee of nothing less than 500,000 U.S. dollars. The leaseable area is 4,786 square feet, has six bedrooms and 6½ bathrooms, including the Presidential Suite. According to Jonathan Miller, president of appraisal firm Miller Samuel,  this sets a record for New York City residential leasing.

And just the other day (December 10th), a 5,400 square feet pent house was leased for 19 million monthly payments. The deal was closed by an agent from the Corcoran Group. According to the Real Estate Agent Mrs. Benalloul, "large apartments are definitely in demand". 

New York is a high density city: 47,214 square feet for 19,378,102 people (as of 2010). The space in New York is certainly in demand and we know for sure that people pays a fortune for a small space... and even more than that for a large apartment as we see in the examples. But the question that will raise now is: for how long? 

FINC 677 & LDEV 664: Millican Reserve

This time we had Mr. Chad Murphy in class. He kindly offered his time and effort and opened himself up to let us dive in this real world project: Millican Reserve.

Mr. Murphy explained a few details and opened himself up for further questions, in class and for throughout the semester.

Some key points regarding Millican Reserve:

The site is located in between State Highway 6 and FM 2154. The whole area is almost 3,000 acre conservation based development. the master plan is divided in several lots and will eventually provide a variety of uses including residential, institutional and commercial, all while maintaining almost 1,200 acres of open green space for use by residents and visitors alike. 

It is considered part of Brazos County and is within the Extraterritorial Jurisdiction of the City of college Station. The land is very unique as it has never been developed. Two wealthy families were key parts in acquiring the land and are taking part on this project as equity investors.

Millican reserve is absolutely dedicated to building a healthy community centered around nature. For this ultimate goal, they have already partenered with different associations like BCS Marathon, Mount Biking Association and Brazos Valley Equestrian Trail Riders. In partnership with these associations, millican Reserve has already organized different events in order to engage the community.

Last Tuesday our presentations finished and all the ideas were great. Due to information disclosure I cannot talk about any details of our projects but this certainly was a great one-time experience where we could see a real case where we could easily visit with the property and work on ideas for it. We all were able to dive in and compete with great ideas, while expanding our Real Estate knowledge.

I was indeed a great project!

FINC 677 & LDEV 664:Mighty Thor & Real Estate.

Today we had in class two visitors: Thor Thornhill and Stephen Hanz. They come from HMT Engineering & Surveying, based in New Braunfels, Texas.
(Sorry, not Mjolnhir)

Thor Thornhill worked in banking first, and then started studying at the MRE program at Texas A&M University (which was called LERE back then). He worked at USAA for 2 years, and then started at HMT Engineering & Surveying.
Stephen is the Civil Engineer of the firm, he is from class 92'. He is the civil engineer behind Schlitterbahn's water park awesomeness.

A few highlights of their presentation:

• They design the water, the streets, the drainage, conduits & anything underground.
• They hand of their plans to a contractor for their client, and then the contractor starts moving the dirt.
• They also do land surveying: As we know, there are pins buried in the ground of buildings everywhere so we can find where our property corners are.
• They do anything from commercial, residential, to water parks.
• One of their biggest projects was a Hospital Campus, a 55 acre project worth 330 million dollars.

FINC 677& LDEV 664 Task #2: An inspiring piece of Real Estate.

A Fascinating parcel of Real Estate

As the most fascinating parcel of real estate, I think I should talk about some piece I've seen with my own eyes and not on a picture. As Peruvian I guess I feel the necessity (or even the obligation) to refer to Macchu Picchu (despite may sound a bit mainstream, don't know how many times I have heard of it). I have had the opportunity to be there 3 times in my life. Only realized how magnificent was on the last trip which was not so long ago.

Don't be fooled with the happy faces. We were almost breathless.

A big citadel made out of big and heavy stones, constructed on a tall mountain, surrounded by the Vilcanota river. According to the History Channel the best explanation for How did the Incas manage to take such heavy rocks crossing such an abundant river and to the top of the mountain is:

LDEV 664 & FINC 677 Task #3: The woodlands

So yes, I picked The Woodlands. I justify my election in the fact that there is a Disney Store in The Woodlands Mall. (Just kidding).
According to city-data.com, the population in The Woodlands from 2000 to 2010 grew 68%. I honestly picked this place basically because I've gone over there quite regularly. Not like I know many places in Texas but I had a gut feeling that this would be a good pick. So decided to run the numbers as was taught in class and these are my findings:

The Woodlands has a Total Basic Employment of 6308.64. As seen in Figure 1, it has 5 basic industries (Those with Location Quotient >1) : Agriculture, Wholesale trade, Transportaion and Warehouse and utilities, Finance insurance and Real Estae and Professional scientific and management.

With these information, we can get the Static Ecomic Base Multiplier. In this case, The Woodlands has an EPM of 7.15. This would allow us to conclude that if an additional 100 basic jobs were brought here, it is highly probably that 615 non-basic jobs would be available.

Finally, I think there is another fact that we should take into account here. Exxon Mobile is building is new campus just south of The Woodlands.
Exxon Mobile campus is expected to have space for almost 10,000 employees, and will bring 2,000 new basic jobs to this area.
Information gathered from: http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml